Mozilla, sticking to its ideals of the open web, decided long ago that support for the patent-encumbered H264 codec would not be included in any of its products. Not only is H264 wholly incompatible with the open web and Free software, it is also incredibly expensive. Mozilla could use one of the open source implementations, but those are not licensed, and the MPEG-LA has been quite clear in that it will sue those who encode or decode H264 content without a license. Software patents, however, are only valid in some parts of the world, so an enterprising developer has started a project that was sure to come eventually: Firefox builds with H264 support.

This is a common misconception. Using it is not illegal. Distributing unlicensed MPEG codecs from inside the US etc. is illegal under under the condition that more than 100,000 copies are distributed per year. (Distributing less than 100,000 is free according to the MPEG-LA's AVC licensing website.)